I seemed to have resolved the problem. I've done over 8 battery pulls throughout the day and that didn't solve the issue. I tried removing Dolphin because that was the last app I updated. That didnt' work either. I then remembered I had install the 2.1 picture gallery, but that was a couple days ago. But I uninstalled that and it seems to be working fine now. I will test it over the next few days.

So after a few factory resets my final resolution was exchanging this phone at the Store. Dude at the store said he's never seen anything like that before. The keyboard on the new phone was a little different tho. The buttons were flatter than my original droid, maybe something is wrong with that batch.